Brussels fires shot in China solar trade war

Brussels has fired the opening shot in a trade war with China by imposing
stinging import duties on Chinese solar panels, levies that will lead to
major increases in the cost of renewable energy for consumers.

Brussels has fired the opening shot in a trade war with China by imposing stinging import duties on Chinese solar panels.Photo: EPA

Germany, Britain and 16 other economically liberal or exporting EU countries are opposed to the unprecedented “trade defence” measurewhich will add almost 48pc to the price of solar cells made in China and which is likely to be overturned by governments in six months.

The European Commission has used its trade defence powers to unilaterally impose an immediate tariff of 11.8pc, rising by another 35.8pc unless Beijing agrees to increasing prices, a gambit that is undermined by widespread opposition to the import duties.

“The ball is now in China's court,” said Karel De Gucht, the EU’s trade commissioner. “This is not protectionism. Rather it is about ensuring international trade rules also apply to Chinese companies – just like they apply to us. As you are aware, also the US currently apply duties to Chinese exports.”

Greg Barker, the energy minister, took to Twitter to denounce the tariffs which will hit companies that install solar energy in people’s homes as part renewable targets to cut climate emissions.

China is the world’s largest producer of solar panels, with exports to the EU worth €21 billion (£18bn) a year and is accused by the EU of selling the renewable technology at up to 88pc below-cost to corner the market.

Unless national governments block the levies in December then they will enter into effect for five years.

The commission argues that Chinese “dumping” means companies from China now account for 80pc of the European market and that its production capacity currently amounts to 150pc of global consumption.

“In the short term, some jobs could be lost among companies installing solar panels. However, as the situation of EU producers improves and imports from other countries increase, these jobs could be recreated,” said a commission statement.

“Any job losses would in any case be substantially less than the 25,000 jobs in the EU solar production industry that are likely to be lost forever if measures are not imposed.”

Robert Sturdy MEP, the Conservative spokesman on trade, warned that the measures would cost jobs, force up prices for consumers, breach environmental policy and damage Europe’s trading relationship with China.

“These duties are going to damage businesses that install solar panels, and force up prices for consumers,” he said.

“We are sending out very bad signals about our environmental commitment and our trading relationship with Asia. If the EU is to grow its economy then we need to put the wider picture ahead of parochial interests and make trade defence decisions based on the wider ramifications that they could have.”